Batteries not included

Leasing batteries for green cars.

The competition is at last hotting up in the green car market. For along time, Toyota had it more or less to itself with the Prius no-plug hybrid. Soon there will be among others plug-in hybrids from GM and Ford, and a pure electric one from Nissan. Charmingly, the GM Volt will be Ampera in Europe; though Volta was Italian.

I have no idea whether hybrids will beat all-electric in the end. Hybrids give you the range of a gasoline-powered car, at the price of complexity, weight and cost. All-electric cars are simpler, lighter, and therefore cheaper: but have limited range. The Nissan Leaf´s current range is 100 miles (160 km) in a standard cycle. It´s lower at higher speed and temperatures: only 70 miles on a highway cycle at 55mph with the a/c on. They don´t quote for 75 mph, so the range for real motorway cruising must be awful.

Renault-Nissan´s real test market isn´t the USA, where the Leaf will be sold as a second car to rich urban trendsetters, but Israel – small, sealed off, and oil-less. In partnership with Israeli Silicon Valley entrepreneur Shai Agassi, they plan a network of battery-switching stations. My uninformed feeling is that battery technology will move quickly enough to make these unnecessary. A 200-mile range at 70 mph, combined with a network of 10-minute high-voltage rechargers, will get you anywhere. You need to stop that frequently anyway for coffee and a pee.

But in fixing this possibly temporary problem Renault-Nissan have solved a bigger one. Everybody else plans to sell green cars just like gasoline ones: a big fixed package, and you pay the (much lower) running costs. Since real people do not inhabit a frictionless financial world, the equivalence between higher capital and lower running costs will be imperfect, and work against the former. More important, the fixed-package model makes the buyer assume all the technological risks. Next year´s model will have a better battery and longer range; why not wait?

Renault-Nissan-Agassi plan to sell the car in Israel without the battery, and lease the latter. Since electricity is very cheap per mile compared to gasoline, consumers will be faced with a comprehensible comparison of running costs.

But to me, the real beauty is that consumers will be protected from a very asymmetric technological risk. The basic design of car bodies was settled a hundred years ago, and progress is now slow and incremental (satnav, ABS braking, etc). In batteries it is likely to be fast and bumpy. Leasing transfers this big risk back to the manufacturer, who is much better placed to plan for, price and hedge it.

Others please copy.

Footnote – update
The Renault-Nissan model that Agassi &c are planning to market in Israel isn´t apparently the Leaf but a different one, an adapted Mégane. This doesn´t affect my argument in the least.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web

6 thoughts on “Batteries not included”

  1. You can absolutely expect real motorway cruising range to be awful, because shape drag increases with the square of the velocity. Cars are much more energy efficient at 55mph than they are at 75mph simply as a matter of physics.

  2. Alessandro Volta was Italian, but Andre-Marie Ampere was a Frenchman. I suppose either the GM is looking for French drivers, or doesn't like Berlusconi or Fiat. Or all three.

  3. Note that the fraction of the adult Italian population with knowledge of who A. Volta was is not much larger than the American one.

    "Volta" in Italian means (1) "time" as in "once upon a time", (2) "vaulted ceiling", and (in a somewhat antiquated fashion that noone uses today) (3) "turn", as in "left turn". I guess any self-respecting Italian focus-group would find all common meanings distasteful for a new car. Just using "Volt" would sound plainly weird – very few words end with a consonantl.

  4. Why would you think batteries will show fast and bumpy progress?

    Despite tremendous commercial incentives (laptops anyone?), progress in batteries has been slow.

    Lead-acid (invented 1859): 41 watt-hours per kilogram.

    Lithium-ion (invented 1980): 128 watt-hours per kilogram.

    I'm guessing making super-efficient batteries is difficult somehow.

  5. TheWesson: For most of the history of batteries, watt-hours per kg have not been what people were looking for. The nice thing about cars is a) the confluence of need and current progress in nanotechnology and b) the easy monetization of tradeoffs. If you make a better battery, you can actually weigh any increased cost per unit against the decrease cost in operation. (Try that with a laptop battery.)

    Oh,and reportedly volvo is adding yet another variation to the mix, with onboard reforming of gasoline to drive a fuel cell that will produce electricity for wheels or batteries.

Comments are closed.